Sunday, May 27, 2007

China is set to becone the #1 CO2 producer in the world. China's rapid industrialization along with its low economic productivity is causing its energy demands to rise at a furious rate.

China is on course to overtake the United States this year as the world's biggest carbon dioxide producer, according to estimates based on Chinese energy data.

The finding might pressure Beijing to take more action on climate change.

China's emissions rose by about 10 percent in 2005, a senior U.S. scientist estimated, while Beijing data shows fuel consumption rose more than 9 percent in 2006, suggesting China would easily outstrip the United States this year, long before a forecast.

Taking the top spot would put pressure on China to do more to slow emissions as part of world talks on extending the United Nations' Kyoto Protocol on global warming beyond 2012.

The nations signed on to Kyoto aren't doing too well on the CO2 front either. Germans in particular are balking at further price increases and other restrictions on their energy supplies.

In the mean time how is the USA, which did not sign on to Kyoto, doing? As it turns out not too bad.

U.S. carbon dioxide emissions dropped slightly last year even as the economy grew, according to an initial estimate released yesterday by the Energy Information Administration.

The 1.3 percent drop in CO{-2} emissions marks the first time that U.S. pollution linked to global warming has declined in absolute terms since 2001 and the first time it has gone down since 1990 while the economy was thriving. Carbon dioxide emissions declined in both 2001 and 1991, in large part because of economic slowdowns during those years.

In 2006 the U.S. economy grew 3.3 percent, a fact President Bush touted yesterday as he hailed the government's "flash estimate" that the country's carbon dioxide emissions dropped by 78 million metric tons last year.

"We are effectively confronting the important challenge of global climate change through regulations, public-private partnerships, incentives, and strong economic investment," Bush said in a statement. "New policies at the federal, state, and local levels -- such as my initiative to reduce by 20 percent our projected use of gasoline within 10 years -- promise even more progress." A number of factors helped reduce emissions last year, according to the government, including weather conditions that reduced heating and air-conditioning use, higher gasoline prices that caused consumers to conserve, and a greater overall reliance on natural gas.

Well what do you know. Market forces, which is just another way of saying voluntary cooperation, are doing a pretty good job. In fact a better job than command and control.

a) A very common explanation that I have heard for the drop in C-O2 production in the U.S. is that a lot of the manufacturing activity has gone over to China. That makes the U.S. numbers look better for awhile, but since the C-O2 issue is a global one, it doesn't really address the issue of global warming.

b) Further, a 1.3% reduction for one year is tiny. We are going to need drastic reductions in C-O2 production, globally, to make a difference.

c) Market mechanisms can certainly be used. Commonly discussed ones are carbon taxes and cap & trade approaches. The cap & trade methodology was spear-headed in the U.S. to curb the acid-rain problem, and worked pretty well.

d) Whereas all that I have heard from the Bush administration sounds like a carry-over from the Bush administration (version Texas), which was to encourage businesses to reduce pollution without any penalties. Apparently, it didn't work very well.

USCAP is an association of U.S. corporations and environmental groups calling for an economy-wide market-driven approach to climate protection. Members include: Alcan, Alcoa, AIG, BP America, Caterpillar, ConocoPhillips, Dow Chemical, Duke Energy, DuPont, General Electric, General Motors, Johnson & Johnson, PepsiCo, PG&E, Shell, Siemens. Their website (http://www.us-cap.org/) describes their point of view and lays out a plan.

d) You keep mentioning Germany as being non-compliant with their Kyoto agreements. All that shows is that German corporations have powerful reasons to fight C-O2 emissions restrictions too; the problem is not confined to the U.S. Why should this be considered a surprise? I'm pretty sure that German cigarette companies, like the U.S. ones, fought bitterly against the warnings printed on cigarette packages, as well. The major difference is the attitude of the governments. The head of the German government, Angela Merkel, is trying to push for more reductions in C-O2 emissions in the European Union. Whereas the U.S. is trying to scuttle C-O2-reduction plans.

The difference in attitude showed up in the earlier issue as well. The notice on U.S. cigarette packs is rather mild, but the German ones say rather starkly, "Smoking can be deadly."

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